China Posts First Quarterly Trade Deficit Since 2004

BEIJING -- China reported its first quarterly trade deficit since 2004 on Sunday as surging prices for commodities pushed up its import bill.

The General Administration of Customs said in an online statement that China posted a trade deficit of $1.02 billion from January to March this year.

However, China reported a small trade surplus of $140 million in March, up from a deficit of $7.3 billion the month before, it said.

Export growth in the first quarter was strong, it said, increasing 26.5 percent to $399.64 billion compared to a year earlier, but imports soared 32.6 percent during that period, to $400.66 billion.

"The value of imports in the first quarter hit a record high for the first time of more than $400 billion," the administration said.

It said China imported more mechanical and electrical equipment, including cars, as well as iron ore and soybeans, than it did a year ago and that the prices of those commodities had all shot up.

Analysts expect a Chinese global trade surplus this year of $160 billion-$200 billion but say that should narrow if oil and commodity prices stay high. Last year, China ran a trade surplus of about $16 billion a month.

A smaller trade surplus might help to ease trade strains with Washington and other governments that complain Beijing is giving its exporters an unfair advantage with currency controls and other policies.

Stronger imports could help economies looking to China's robust growth to drive demand for their goods. Imports also might benefit from ongoing government efforts to boost consumer spending to reduce reliance on exports and investment.

China is a major importer of oil, iron ore and raw materials and runs a deficit with suppliers such as Saudi Arabia and Australia. It pays for that by running multibillion-dollar surpluses with the United States and Europe.

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Online:

General Administration of Customs of China (in Chinese):

Array

Comments

[EinChicago]

09:18 AM on 04/12/2011

The China bubble is about to burst. and t will be a doozy. China's development has been based on colonialism and using its population as effective slave labor. Once that workforce becomes too expensive, they crash and the developed world moves onto a different location. Colonialism has done this for millenia and will continue to do so. There is an inherent quid pro quo in the market with China and the developed world consumer right now; China produces substandard crap but at cheap prices. Once prices rise, there is no reason to buy the substandard Chinese good over a regular quality domestic good, so the choice becomes either (a) buy the domestic good or (b) buy a substandard good for a cheaper rpice made somehwere in Africa.


Anyone investing in China now may as well be buying pets.com stock in 1999. It's the same risk.

[Duppy]

04:37 PM on 04/11/2011

when Americans are unemployed (especially the ones that buy the crap from China), China suffers. Rich Americans will not buy Chinese crap, just the poor and unemployed that can afford nothing else.

[cornel]

09:26 AM on 04/11/2011

China is importing heavy equipment to build it's 21st century infrastructure. It will pay off big time in 10 years. We should do the same or we will loose our leadership and this might happen faster then anyone thinks !

[LightShadow62]

01:45 AM on 04/11/2011

As the Chinese workforce becomes better educated Chinese companies are starting to outsource for cheaper labor.

[Social Construct]

08:32 AM on 04/11/2011

Ironically, within a generation, that cheaper labor will probably be us in the US.

[LightShadow62]

08:36 AM on 04/11/2011

If the Republicans are left unchecked it will happen much sooner than that.

[stape45]

01:06 AM on 04/11/2011

Just don't be fooled onto thinking they're doing poorly. They ain't.

[stape45]

01:06 AM on 04/11/2011

into thinking..

[jabailo]

12:26 AM on 04/11/2011

The cheapskates are finally buying stuff.

[cornel]

09:28 AM on 04/11/2011

You have not been following the stock market lately ! China has already infiltrated most of our larger manufacturing corporations !

[Foodgrade]

11:50 PM on 04/10/2011

Tariff China.

[nkurland]

09:58 PM on 04/10/2011

As China continues to develop its rural areas, farming will continue to be phased out, creating the need for greater and greater amounts of wheat and soybeans.

[DRaymond]

09:31 PM on 04/10/2011

Lets be clear, the commodity that has really shot up in price is oil.  And the fact that other commodities have shot up is mostly because nearly everything has an energy component to get it to market.

Now do folks see why becoming energy independent is important?

[Jon Mendoza]

10:29 PM on 04/10/2011

If we could just find something that is completely renewable like solar...

[EvolveorPerish]

01:39 AM on 04/11/2011

Yes, or there was just an infinite supply of it somewhere . . .

[cornel]

09:33 AM on 04/11/2011

China is the second largest producer of solar panels and this was last year !
http://www.dailyfinance.com/story/china-solar-panel-manufacturing/19501556/
They are not sleeping in China, unlike us !
http://www.dailyfinance.com/story/china-solar-panel-manufacturing/19501556/

[cornel]

09:34 AM on 04/11/2011

Sorry, here the second link -> http://cleantechnica.com/2011/04/01/china-to-cut-nuclear-increase-solar-power-goals-after-japan-crisis/

[Rudym]

08:58 PM on 04/10/2011

You said it all, It pays for that by running multibillion-dollar surpluses with the United States and Europe.

Don't bother writing another useless to the USA article unless you write about the total failure of the USA Congress to regulate trade in the interests of the USA as is their Constututional responsibilty that they swore to uphold when they entered Congress. They are doing one heckofajob to allow outsourcing of USA manufacturing jobs and services for the interests of China, India, and everyone else other that middle class workers that are slipping out of the middle class into poverty levels because of their ineptness and lrrisponsibility of Congress to fulfill its duties to regulate trade in the interests of USA workers who they are supposed to be representing..

[Foodgrade]

11:51 PM on 04/10/2011

fanned. you said it all.

[deCruz]

01:02 AM on 04/11/2011

"manufacturing jobs and services for the interests of China, India"

FYI, the US and India have a small and relatively balanced trade relationship.

~~~~~~

2010 US Services trade with India:

US exports: 10.6 billion
US imports: 13.5 billion
Source: BEA
http://tinyurl.com/beadata1

~~~~~~

2010 US Goods Trade Deficits
In Billions of USD
TradeDeficit, Pct_Of_Total_Deficit, Country

633.9, 100.0%, TOTAL

273.1, 43.1%, China
66.3, 10.5%, Mexico
59.8, 9.4%, Japan
34.5, 5.4%, Germany
27.7, 4.4%, Canada
26.6, 4.2%, Ireland
26.5, 4.2%, Nigeria
22.1, 3.5%, Venezuela
19.8, 3.1%, Saudi Arabia
19.7, 3.1%, Russia
14.3, 2.3%, Italy
13.7, 2.2%, Thailand
13.3, 2.1%, Algeria
11.9, 1.9%, Malaysia
11.5, 1.8%, France
11.2, 1.8%, Vietnam
10.7, 1.7%, Angola
10.5, 1.7%, Iraq
10.3, 1.6%, India
10.0, 1.6%, Korea, South
9.9, 1.6%, Taiwan
9.7, 1.5%, Israel
9.5, 1.5%, Indonesia
5.9, 0.9%, Sweden

-94.6,-, Rest of the World

Source: Census Bureau
http://tinyurl.com/3urcbfg

[Rudym]

04:11 PM on 04/12/2011

deCruz. Do the totals include the amount of dollars paid by manufacturers for pay to foreign laborers that replaced USA laborers outsourced jobs?

The trade imbalance figures are for imports vrs exports goods but make no mention of outsourced labor.

When free trade supporters tell me that the reduction in USA manufacturing jobs is because of automation, I remind them that the increased production figures are shown in dollars which means it the manufacturer labor cost went down when they oursourced the USA job and shows up as increased or more efficient production when in fact it is robbing an USA manufacturer or customer service laborer and replacing them with a lower paid foreign laborer.

Would appreciate your reply because you have a good grasp of sources of statistics.

Thanks
o
SA worker and rewarding a foreign source laborer.

[KarateKid]

08:57 PM on 04/10/2011

So much for _Communism............

[blackranger]

06:48 PM on 04/10/2011

China is importing raw materials and food. Apparently it is consuming a lot of those raw materials for building in China, creating a larger and larger market for its goods. The US trade deficit with China is being supported by that deficit. It would seem that China will need the US as a market less and less. The countries that are exporting to China are, for the most part, also developing countries building markets for Chinese goods. Who would you trade with if you had your choice? Someone who is paying you in dollars, or someone who has goods you need to trade? If we are going to be part of the global economy, this might be something to take a hard look at before it is too late.

[mike72]

07:11 PM on 04/10/2011

That is a great observation. In essense, China is creating a consumer oriented market using its manufacturing power as the "money."

That is what is suppose to be in international trade, in which countries trade in exchange for goods and services. Unfortunately it has turned up side down with US "cheating" the world by paying in printed paper money instead, without backing it with gold or other products and goods.

[rainkitty]

08:05 PM on 04/10/2011

Perhaps that is why the IMF is calling for the devaluation of the dollar. Keep your camping gear handy.

[EinChicago]

09:19 AM on 04/12/2011

Riiiiiigggggghtt. The China bubble will last forever, just like Dubai, and the Dot.Com bubble...*snicker*

[Stephen Davies]

05:54 PM on 04/10/2011

Dont worry about it Walmart's order is in the mail,

[mike72]

07:13 PM on 04/10/2011

Actually it is Wal-Mart that is worrying because it is getting harder and harder for it to pay the Chinese with printed paper money.

As much as people diss on Wal-Mart, it is actually the essential mechanism of the US Empire to suck in resources from around the world.

[Foodgrade]

11:52 PM on 04/10/2011

boycott WalMart. Bankrupt them.

[LUVpolitics2]

05:30 PM on 04/10/2011

Trade deficit so what? If you go all the way to the end of the article, it is pointed out they still have a HUGE surplus with the US. Besides that, China's scientists are set to overtake us in science, too. http://tiny.cc/2ywkl We had better get our education system in order pronto.

[Michael GE]

04:15 PM on 04/10/2011

*sighs*
It is somewhat unwise to apply a strict American point of view about how businesses and the world are run best on anything other than the US itself.
Many complain here about the quality of Chinese goods (besides, I assume, many of these never opened up their trusted computer to read on any item in there "Made in China"). Well, the difference in price tag between a no-name or Chinese brand power drill and one made by German Bosch company is considerably. Or, as Germans would say: "We need to be so much better in quality as we are more expensive". The difference is know-how and training, none of which you get these days from cheap labor. A Chinese engineer who can work on that level will not work for peanuts in China because he can work as well for the same salary a German engineer can get in Germany.
Oh, and btw. since someone quoted the NYT and the poor structure of Chinese bullet trains): What about Boeing 737 and surprising roof tops? Prime quality?
Can't the US just focus on their own strength instead of other nations' weaknesses? You lead in many fields of research (like algea and renewables). The Super Cobra is an awesome design. Just stop telling the rest of the world we need to go back to the 50ies.

[Fatdoggie]

11:26 PM on 04/10/2011

Its possible the Wright Amendment has placed additional stress on the Southwest 737s due to the additional required stops. Probably go threw more tires and still provide less expensive service. If they were not so inconvienient I would use them rather than American and the MD80 or whatever it is.